The Fund is designed to make mezzanine debt loans that fill the financing gap between developer equity and traditional bank financing. It will invest in physical properties that are either completed or build to suit, that have a UAE-focus in a wider GCC context, and that could provide a strong rental income stream with mid- to long-term capital growth.

How does Fund II differentiate itself from other regional Real Estate funds?

Crestmount ascertains and narrows the investment options by identifying property types it believes will benefit from long-term sector trends. The team also rely heavily on fundamental research when evaluating potential fund holdings, including real estate market cycle study, property valuation, and management and structure assessment.

Why now does the opportunity offered by Fund II impress upon the region?

Home and real estate ownership is a basic desire in every economy, including in the GCC. The region is endowed with a young, growing and increasingly well-educated population that can significantly enhance the region’s future growth trajectory. The region’s population is projected to increase by more than a quarter by 2030, and a significant proportion of that population will be of prime working-age. The potential of this large workforce to contribute to economic growth and social vitality is incredible, provided that the region’s labour markets are prepared.

What is a real estate cycle?

A real estate cycle is defined as a series of recurring happenings that are reflected in demographic, economic and sentimental dynamics which have an effect on supply and demand in the property market. Therefore, property values may increase due to robust market growth, stabilise or may even decline through certain stages of the cycle. It is important for an investor to recognise at which phase the market is and then to secure the acquisition in the right location, at the right price.

The pattern of a property cycle comprises four phases, following a predictable sequence between peaks, starting from the downturn stage, followed by the trough, and then on to the recovery and lastly the upswing.

What is the role of the Sharia Supervisory Board (SSB)?

The SSB analyzes the fund’s investment opportunities to determine Sharia-compliance, and subsequently issues approvals if the requirements are met. The SSB ensures that non-Sharia compliant profits are kept separate from Sharia-compliant fund profits, and also coordinates the income purification process. The SSB conducts an annual Sharia audit and issues a report for the fund’s investors.